Rules on Double Sale – (Art.

1544)

a. Heirs of Corazon Villeza v. Aliangan, GR Nos. 244667-69, 02 December 2020

Facts:
 three (3) parcels of land all registered under the name of Corazon Villeza
(Corazon).
 It is alleged that Corazon, during her lifetime, sold the subject properties to sisters
Elizabeth Aliangan (Elizabeth) (a long-time neighbor and friend) and Rosalina
Aliangan (Rosalina), [respondents herein].
 On January 10, 2006, Elizabeth and Rosalina, as buyers, and Corazon and Rosario
Agpaoa (Rosario), as sellers, entered into a Deed of Conditional Sale for the sale of a
residential house and an undivided parcel of land, for a purchase price of
[P]450,000.00.
 On August 3, 2009[,] however, Corazon died without executing any deed of
conveyance in [respondents'] favor. [Respondents] thus filed three (3) separate
Amended Complaints for "Specific Performance and Damages", to compel
[petitioners Heirs of Corazon Villeza, namely Imelda V. dela Cruz, I, Stella Imelda II
Villeza, Imelda Villeza III, Robyl O. Villeza and Abigail Wehr, (petitioners)], legal
heirs and collateral relatives of Corazon, to execute the subject deeds.
 RTC rendered the x x x Decisions in favor of [respondents]
 under the January 10, 2006 Deed of Conditional Sale, [respondents] have already
paid the entire purchase price. The remittance receipts also show that Corazon
intended to sell: the Bunay property to Elizabeth; and the Poblacion property to
Rosalina
 RTC found that [respondents], being former Filipino citizen[s] are not disqualified by
law to acquire real properties subject to certain limitations. The RTC added that
Elizabeth has in fact re-acquired Philippine citizenship when she took her oath of
allegiance to the Republic of the Philippines.
 Aggrieved, [petitioners appealed to the CA.]11-The CA, in its Decision dated
December 17, 2018, found the appeals without merit
 As heirs, they take the estate by right of succession subject to all obligations resting
thereon in the hands of her from whom they derive their rights.
 the CA regarded it as a "contract to sell" because of its provision that: "the
corresponding Deed of Absolute Sale shall be executed by the VENDORS upon full
payment of the balance." The obligation of Corazon to transfer ownership by
delivery arises upon full payment of the purchase price
 The Statute, however, simply provides the method by which the contracts enumerated
therein may be proved but does not declare them invalid because they are not reduced
to writing.
 i. Rosaroso v. Soria, GR No. 194846, 19 June 2013
Case: https://lawphil.net/judjuris/juri2013/jun2013/gr_194846_2013.html
Digest:

Facts:
 Spouses Luis Rosaroso (Luis) and Honorata Duazo (Honorata) acquired several real
properties. The couple had nine (9) children namely: Hospicio, Arturo, Florita,
Lucila, Eduardo, Manuel, Cleofe, Antonio, and Angelica. On April 25, 1952,
Honorata died. Later on, Luis married Lourdes Pastor Rosaroso (Lourdes).
 Luis filed a complaint for Declaration of Nullity of Documents with Damages
against his daughter, Lucila R. Soria (Lucila); Lucila’s daughter, Laila S. Solutan
(Laila); and Meridian Realty Corporation (Meridian).
 Due to Luis’ untimely death, however, an amended complaint was filed on January
6, 1996, with the spouse of Laila, Ham Solutan (Ham); and Luis’ second wife,
Lourdes, included as defendants.

Petitioner’s Claim:
 In the Amended Complaint, it was alleged by petitioners (Rosaroso) that on
November 4, 1991, Luis, with the full knowledge and consent of his second wife,
Lourdes, executed the Deed of Absolute Sale (First Sale) covering the properties
with Transfer Certificate.
 Despite the fact that the said properties had already been sold to them, respondent
Laila, in conspiracy with her mother, Lucila, obtained the Special Power of
Attorney (SPA) from Luis (First SPA); that Luis was then sick, infirm, blind, and
of unsound mind; that Lucila and Laila accomplished this by affixing Luis’
thumb mark on the SPA which purportedly authorized Laila to sell and convey,
among others.
 Second sale took place on August 23, 1994, when the respondents made Luis sign
the Deed of Absolute Sale conveying to Meridian three (3) parcels of residential
land for ₱960,500.00 (Second Sale); that Meridian was in bad faith when it did not
make any inquiry as to who were the occupants and owners of said lots; and that if
Meridian had only investigated, it would have been informed as to the true status
of the subject properties and would have desisted in pursuing their acquisition.

Counter Claim:
 Lucila and Laila contested the First Sale in favor of petitioners.
 Their documents were valid because Luis was conscious and of sound mind and
body.
 Meridian averred that Luis was fully aware of the conveyances he made.
 Sophia Sanchez (Sanchez), Vice-President of the corporation, personally witnessed
Luis affix his thumb mark on the deed of sale in its favor.
RTC Ruling:
  RTC ruled in favor of petitioners.
 when Luis executed the second deed of sale in favor of Meridian, he was no longer the
owner of Lot Nos. 19, 22 and 23 as he had already sold them to his children by his first
marriage.
 the subject properties had already been delivered to the vendees who had been living
there since birth and so had been in actual possession of the said properties.
 It was of the view that the actual registration of the deed of sale was not necessary to
render a contract valid and effective because where the vendor delivered the possession
of the parcel of land to the vendee and no superior rights of third persons had
intervened, the efficacy of said deed was not destroyed. In other words, Luis lost his right
to dispose of the said properties to Meridian from the time he executed the first deed of
sale in favor of petitioners.

Ruling of the Court of Appeals:

 CA reversed and set aside the RTC decision.
 The first deed of sale in favor of petitioners was void because they failed to prove that
they indeed tendered a consideration. It relied on the testimony of Lourdes that
petitioners did not pay her husband.
 CA stated that the Second Sale was valid because the documents were notarized and, as
such, they enjoyed the presumption of regularity.

Petitioners filed the present petition with the following ASSIGNMENT OF ERRORS
 ERRED WHEN IT DECLARED AS VOID THE FIRST SALE
 MERIDIAN REALTY CORPORATION A BUYER IN BAD FAITH
 ERRED IN NOT HOLDING THE SALE NULL AND VOID FROM THE VERY
BEGINNING SINCE LUIS ROSAROSO WAS NO LONGER THE OWNER OF LOTS 8,
19, 22 AND 23

 the second deed of sale was null and void because Luis could not have validly transferred
the ownership of the subject properties to Meridian, he being no longer the owner after
selling them to his children.
 a public document executed [with] all the legal formalities is entitled to a
presumption of truth.
 A notarial document is by law entitled to full faith and credit upon its face
 Petitioners indeed paid their father and their payment helped him sustain his daily needs.
 Meridian was a buyer in bad faith because when its representative visited the site, she
did not make the necessary inquiries. Meridian was a buyer in bad faith because when its
representative visited the site, she did not make the necessary inquiries.
 Meridian’s assertion that the Second Sale was registered in the Register of Deeds was a
falsity.

Court finds for the petitioners: The First Deed of Sale Was Valid
  The following are disputable presumptions:
(1) private transactions have been fair and regular;
(2) the ordinary course of business has been followed; and
(3) there was sufficient consideration for a contract.
 Lordes’ testimony, however, is self-serving and would not amount to a clear and
convincing evidence required by law 

Meridian is Not a Buyer in Good Faith

 Respondent’s claim: Good faith and had them first recorded in the Registry of
Property, as they were unaware of the First Sale.

Article 1544. If the same thing should have been sold to different vendees, the ownership shall
be transferred to the person who may have first taken possession thereof in good faith, if it
should be movable property.
Should it be immovable property, the ownership shall belong to the person acquiring it who in
good faith first recorded it in the Registry of Property.
Should there be no inscription, the ownership shall pertain to the person who in good faith was
first in the possession; and, in the absence thereof, to the person who presents the oldest
title, provided there is good faith.

Otherwise stated, ownership of an immovable property

(1) to the person acquiring it who in good faith first recorded it in the Registry of Property;
(2) in default thereof, to the person who in good faith was first in possession; and
(3) in default thereof, to the person who presents the oldest title, provided there is good faith.

The requirement of the law then is two-fold:

Acquisition in good faith and registration in good faith.

The principle of primus tempore, potior jure (first in time, stronger in right)

 When a piece of land is in the actual possession of persons other than the seller, the buyer
must be wary and should investigate the rights of those in possession. Without making such
inquiry, one cannot claim that he is a buyer in good faith.

General rule:
A purchaser may be considered a purchaser in good faith when he has examined the latest
certificate of title.

Exceptions:
When there exist important facts that would create suspicion in an otherwise reasonable
man to go beyond the present title and to investigate those that preceded it.
 The failure of appellees to take the ordinary precautions in buying a piece of land in the
actual, visible and public possession of another person, other than the vendor, constitutes
gross negligence amounting to bad faith.
 If a vendee in a double sale registers the sale after he has acquired knowledge of a previous
sale, the registration constitutes a registration in bad faith and does not confer upon him any
right. If the registration is done in bad faith, it is as if there is no registration at all, and the
buyer who has first taken possession of the property in good faith shall be preferred.

Meridian, through its agent, knew that the subject properties were in possession of persons other
than the seller. Instead of investigating the rights and interests of the persons occupying the said
lots, however, it chose to just believe that Luis still owned them. Simply, Meridian Realty
failed to exercise the due diligence required by law of purchasers in acquiring a piece of land in
the possession of person or persons other than the seller.

ii. Heirs of Ciriaco v. Quinones, GR No. 205680, 21 November 2018

Facts:
 Florence Quinones (Florence), together with her husband Jeremias Donasco
(respondents), filed action for Specific Performance and Damages against the heirs of
Bayog-Ang (petitioners).
 Subject: parcel of land, part of the property previously owned by Ciriaco Bayog-Ang.
 Respondents claimed that the said parcel of land was sold to her by Bayog-Ang as
evidenced by a Deed of Absolute Sale dated February 25, 1964, and she demanded from
the petitioners that the said portion be segregated and transferred but the same went
unheeded.
 Petitioners, through alleged malicious manipulation, executed an Extrajudicial Settlement
of Estate in 1996 adjudicating the land in their favor, which canceled and Transfer
Certificate of Title.

Respondents
 Respondents claimed that the said parcel of land was sold to her by Bayog-Ang as
evidenced by a Deed of Absolute Sale dated February 25, 1964, and she demanded from
the petitioners that the said portion be segregated and transferred but the same went
unheeded.
 Respondents claimed that petitioners, through alleged malicious manipulation,
executed an Extrajudicial Settlement of Estate in 1996 adjudicating the land in their
favor.
 Respondents prayed for the nullification of the Deed of Extra-Judicial Settlement.

Petitioners
 Denied any knowledge of the deed of sale executed by Bayog-Ang in favor of Florence
nor of the latter's claim over the land.
  Before the execution of the extra-judicial settlement, they went to the Register of Deeds
to verify the status of the land and found nothing was annotated on the certificate of
title.

Florence testified that she purchased a parcel of land from Bayog-Ang which was paid for by
her father Pedro Quinones (Pedro). As a result, a Deed of Absolute Sale was executed on
February 25, 1964 and notarized before a certain Atty. Cambronero. Furthermore, the pertinent
documents (including the certificate of title and tax declaration) were given by Bayog-Ang to
Pedro who in turn gave them to Atty. Domingo for purposes of transferring title to her name. It
was only in 1980 when Atty. Domingo returned the papers to her that she learned that the
papers to the land were not processed.

The Ruling of the RTC

 Dismissed.
 Article 1544, since petitioners were the first to register the land in good faith, they have a
superior right over the subject land.
 at the time the plaintiffs laid claim to the land, the same has already been registered, titled
in the names of the defendants.

Ruling of the court

 In ruling in the respondents' favor, held that laches had not set in as to bar respondents
from asserting their claim of ownership since they were able to present evidence that they
exercised acts of dominion over the subject lot, as they in fact installed a tenant, without
resistance from the petitioners, and were able to effect the transfer of the tax declaration
in their name in 1984. The CA also found that petitioners recognized that respondents
laid claim over the subject land.
 respondents were able to prove that Bayog-Ang sold to them the subject land during his
lifetime
 CA declared the Deed of Extrajudicial Settlement of Bayog-Ang estate invalid.

Petitioners sought reconsideration of the CA Decision

Court deny the petition for lack of merit.

Article 1544 of the New Civil Code does not apply in the present case
 because the "second transaction," as the RTC would describe it, is not a sale.

Proper Question:
 whether Florence was able to prove by preponderance of evidence that she already
acquired ownership of the subject lot from Bayog-Ang, as this will determine whether the
subject lot remained part of Bayog-Ang's estate which passed to his heirs by succession
at the moment of his death.
Article 1496 the ownership is acquired from the moment it is delivered to him in any of the
ways specified in Articles 1497 to 1501
Article 1497 provides that "the thing sold shall be understood as delivered, when it is placed in
the control and possession of the vendee.
Article 1498 states that "when the sale is made through a public instrument, the execution
thereof shall be equivalent to the delivery of the thing which is the object of the contract, if from
the deed the contrary does not appear or cannot clearly be inferred."

In the present case, what is fairly established is that the Deed of Absolute Sale is a notarized
document. The RTC, in its Judgment dated February 27, 2006, stated that during the
proceedings, Florence testified that the Deed of Absolute Sale.

CA: Being a notarized document, the Deed of Absolute Sale is a public document.
Deed of Absolute Sale, being a public document, requires no other proof of its
authenticity36 and deserves full faith and credit upon its face.

The action is not barred by prescription or laches

 the respondents' complaint has not prescribed nor were they guilty of laches.
 WEEK 4

i. Spouses Alfredo v. PCI Leasing, GR No. 139233, 11 November 2005

 On April 18, 1994, the spouses Rosario purchased an Isuzu Elf Pick-up Utility vehicle
from CarMerchants, Inc
 Purchase Agreement: Downpayment of ₱190,000.00 of the total purchase price of
₱380,000.00.
 The spouses then applied for a loan with PCI Leasing to pay for the balance of
₱190,000.00.
 Spouses Rosario executed a Promissory Note in favor of PCI Leasing covering the
amount of the loan plus ₱84,008.00 as finance charges.
 In case of default, the payment of the outstanding sum with interest shall immediately
become due and payable. To secure the payment of the loan, they executed, on the same
day, a Chattel Mortgage in favor of PCI Leasing over the Isuzu Elf 4BD1. The motor
vehicle was delivered to the spouses and it was registered in their names on May 16,
1994.
 Despite demands, the spouses Rosario failed to pay the amortizations on their loan to
PCI Leasing.

 PCI Leasing filed a Complaint against the spouses Rosario in the RTC of Dagupan City
for "Sum of Money with Damages with a Prayer for a Writ of Replevin.
 After PCI Leasing posted the necessary bond for the manual delivery of the motor
vehicle, the Sheriff turned over the possession of the vehicle to PCI Leasing without the
court issuing an order discharging the writ.

Spouses Rosario:
 Chattel mortgage was in effect a contract of sale of personal property, payable in
installments to be governed by Article 1484.
 Since PCI Leasing opted to foreclose the chattel mortgage, it was estopped from
collecting the balance of their account under the promissory note and chattel mortgage.

 PCI Leasing presented its evidence. When it was time for the spouses Rosario to present
their own evidence, they failed to appear despite notice and were consequently declared
in default.

The trial court rendered judgment on September 12, 1996 in favor of PCI Leasing
 Spouses Rosario were only able to pay the monthly installments on their loan from
May to November 1994
 Spouses account was overdue by ₱338,786.03, inclusive of attorney’s fees and
liquidated damages.
  The trial court did not, however, resolve the issue of whether Article 1484 of the New
Civil Code was applicable.

Spouses Rosario Appeal to CA:

 CarMerchants, Inc. had assigned to PCI Leasing its right to collect the balance of the
purchase price of the motor vehicle; hence, it was subrogated to the rights of
CarMerchants, Inc., subject to the limitations and burdens provided for by law.
 by securing a writ of replevin from the RTC, PCI Leasing had opted to foreclose the
chattel mortgage under Article 1484 of the New Civil Code; thus, it was barred from
suing for the unpaid balance of the purchase price of the vehicle.

The Supreme Court said:

The rule is: If there has been no foreclosure of the chattel mortgage or a foreclosure sale, then
the prohibition against further collection of the balance of the price does not apply. This is
also the answer to the first question above.

In this case, the spouses were not able to sufficiently prove that PCI foreclosed the mortgage.
Thus, PCI can still collect the balance due from the spouses.